Tag: liquidity crisis

Monday, December 17, 2018

Daily Writing

Housekeeping

Over the next few days, we are gearing up for a long-scheduled, much-anticipated trip to China on December 25, 2018. Throughout this week we will focus on some of our main goals for the China trip. I am genuinely worried about the state of China, its economy, and its political climate.

Things I’m thinking about

How does the average Chinese citizen view the economy vis-à-vis the “average” Chinese political and/or business elite?

How have views of the United States changed since this time last year?

What are Chinese companies doing to prepare for a global economic slowdown?

What is the overall market sentiment China?

If folks in China aren’t worried about the economy, then what are they worried about?

Market Observations

The S&P started the day with a 1.00% spike downward. US Treasury yields continue their push lower, with the yield on the 10-year Treasury now 2.86% and the yield on the 30-year Treasury now 3.13%. Keep in mind that just a few weeks prior the yield on the 10-year Treasury Note was higher than 3.25%. At the time many experts felt that US Treasuries could online continue to move higher, with some speculating that the 10-year yield was more likely to reach 4.00% than 3.25%.

The CBOE put/call ratio also remains elevated, at time of writing sits at 1.16 after opening the day at 1.24. The average ratio is 0.76, and a rate over 1.00 is elevated. The CBOE put/call ratio is a measure of overall fear in the market.

At the time of writing, WTI crude has dropped more than 3.50% where it currently sits at $49.40/barrel. I find it interesting that amid the current market turmoil gold has hardly budged. For the past few months, gold has traded within a tight range between $1200 – $1250/oz.

Personal thoughts

I’m not sure if this belongs in my daily writing, but I feel it is essential to grant this sliver of insight into my own thinking.

When I wake up each morning, I tell myself three things that help propel me forward:

I will be proud of my actions

I will strive to help others

I will be kind

It can be quite tricky to balance these things, and the results are not immediate. However, in general, I’ve found that by following these commands that I give myself I can enhance my own learning and growth. The focus is not on me, but those around me. Also, I do not ‘hope’ to accomplish these tasks each day, I give myself the command that I ‘will’ strive to accomplish these things each day. This allows me to feel a greater sense of control and accountability for my actions. I must be a pillar of support for others, but I also must be vulnerable at times. Kindness is highly undervalued.

Developing a personal investing style

Last week I met with a trusted advisor for lunch. We discussed the importance of identifying broad trends in market behavior and even human behavior. Sometimes patterns cannot be quantified 100%, although that doesn’t deter many from trying.

My biggest takeaways were focusing on using Time to my advantage. It seems obvious, but the more time you have, the more options and flexibility you must employ different strategies. The second takeaway was the importance of discovering my own style and utilizing that style to my advantage. I’ll never be able to obtain an edge if I blindly copy the path of others, even if I emulate Warren Buffett there will be times where I need to make decisions based on my own intuition, experiences, and processes. I’ll never be the next Warren Buffett because I am focused on being the next Kevin Tellier.